Grand City Properties starts exchange, tender offers for two notes

By Marisa Wong

Los Angeles, April 2 – Grand City Properites SA launched an invitation to holders of two series of subordinated notes to either (i) exchange any and all of their existing notes for new notes and cash or (ii) exchange a portion of the existing notes and tender the remainder for purchase, according to a notice on Tuesday.

Specifically, Grand City Properties is inviting holders of its outstanding €200 million undated subordinated notes subject to interest rate reset with a first call date in 2023 with a current coupon of 6.332% (ISIN: XS1491364953) and €350 million undated subordinated notes subject to interest rate reset with a first call date in 2023 with a current coupon of 5.901% (ISIN: XS1811181566), to either:

• Offer to exchange any and all existing notes of each series for exchange consideration comprising (a) newly issued euro-denominated undated subordinated notes subject to interest rate reset with a first call date in 2030, issued by Grand City Properties Finance Sarl and guaranteed by Grand City and (b) a cash amount; or

• Offer to exchange 85% in aggregate nominal amount of any and all existing notes of each series and tender 15% in aggregate nominal amount of any and all existing notes of each series for purchase for cash.

Consideration

The exchange consideration for the 6.332% notes consists of a principal amount of new notes equal to 100% of the aggregate nominal amount of 6.332% notes accepted for exchange and a cash amount equal to 6% of the aggregate nominal amount of 6.332% notes accepted for exchange.

The tender consideration for the 6.332% notes is an amount in cash equal to 85.75% of the aggregate nominal amount of 6.332% notes accepted for exchange.

The exchange consideration for the 5.901% notes consists of a principal amount of new notes equal to 98% of the aggregate nominal amount of 5.901% notes accepted for exchange and a cash amount equal to 5% of the aggregate nominal amount of 5.901% notes accepted for exchange.

The tender consideration for the 5.901% notes is an amount in cash equal to 81.25% of the aggregate nominal amount of 5.901% notes accepted for exchange.

The company will also pay accrued interest.

New notes

The new perpetual notes offered in exchange will have an initial coupon of 6.125% and a first call date on Jan. 16, 2030. The interest rate will reset to the five-year mid-swap rate plus a margin of 350.8 basis points on April 16, 2030, 375.8 bps on April 16, 2035 and 450.8 bps on April 16, 2050.

The new hybrid notes are subject to a minimum issue size of at least €150 million.

Details

The offers expire at 11 a.m. ET on April 9.

Settlement is slated for April 16.

The dealer managers for the offers are BofA Securities Europe SA (+33 1 877 01057; DG.LM-EMEA@bofa.com), Citigroup Global Markets Ltd. (+44 20 7986 8969; liabilitymanagement.europe@citi.com), Goldman Sachs International (+44 20 7774 4836; liabilitymanagement.eu@gs.com) and J.P. Morgan SE (+44 20 7134 2468; liability_management_EMEA@jpmorgan.com)

Kroll Issuer Services Ltd. (+44 20 7704 0880; gcp@is.kroll.com; https://deals.is.kroll.com/gcp; attn.: Owen Morris) is the exchange agent.

Grand City Properties is a Luxembourg-registered specialist real estate company focused on investing in and managing value-added opportunities in the real estate property market in Germany, primarily in densely populated areas.

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